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The chapter synthesizes research on compensation and motivation, identifying compensation strategies to optimize outcomes in public organizations. While public service motivation is most closely linked with performance-based pay in research, other facets of compensation policy are relevant to public service motivation. The chapter outlines these other facets and discusses specific strategies to improve outcomes through compensation. First, the chapter argues for the use of total compensation for benchmark comparisons to control the extrinsic-to-intrinsic reward ratio. The chapter subsequently discusses base pay, different base pay schemes like alternative wages and efficiency wages, and strategies to maximize the value of these schemes. Next, mobility systems, like pay for ability, skills, and performance, are discussed. The chapter discusses the viability of the contest and tournament models and makes other recommendations for mobility systems. Penultimately, the chapter discusses incentives, motivation crowding and recommends that governments avoid high-power incentives that crowd-out public service motivation. The chapter concludes with a discussion of position classification.
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